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Why I bought Ebay stock

As some of you already know, I like stocks with wide moats like the Washington Post. Ebay has lots of competition, but it’s kind of like the ‘zine’ I started in high school trying to compete with an established paper like the Washington Post. To really compete with Ebay is going to cost a fortune. The cost is so prohibitive, that Yahoo has all but given up on their auctions.

Yes, I remember a time when many Ebay sellers also used Yahoo because there was no listing fee. There were also no buyers so we quicly stopped wasting our time. Then Yahoo did begin charging a listing fee. I don’t know what happened to Yahoo auctions, but I guess they died.

So anyway, I like Ebay because it’s hard for new companies to compete. Ebay has been declining recently. At 28.5o right now, PE is close to 40 but forward PE is 22.63. PEG is a decent 1.32.

I also think that new deal with Google (where Google supplies ads to Ebay) will be a big success. People spend leisure time on Ebay, meaning that they are ready to take hours looking for things they want to buy. That’s the other key; they want to buy. Take someone who wants to buy, put ads in front of them for a few hours and I bet they start clicking.

As always, I can give you advice. But I can tell you what I’m doing so that you can go do your own stock research and decide for yourself.

This entry was posted on Sunday, September 10th, 2006 at 12:39 pm and is filed under Stocks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Responses to “Why I bought Ebay stock”

  1. Bob Says:
    September 10th, 2006 at 6:55 pm

    Buy some uranium stocks they are about to rocket in our hunble opinion.
    From the team at uranium-stocks.net

  2. Alfredo Gutierrez Says:
    September 14th, 2006 at 10:46 pm

    Dear James,

    I read your blog about enjoyed what you had to say. I’m currently searching for financial bloggers for a new financial portal and investor community. Your point of view and knowledge would fit in great into the portal. This would be a great opportunity to broaden your online exposure and market tools. If this is something that might interest you, Please contact me.

  3. TJP Says:
    December 26th, 2006 at 5:48 am

    eBay is a heavyweight when it comes to online shopping. I don’t understand why Yahoo! would try to compete anyways.

    They have Google to worry about!

    I also wrote a series on that sheds extra light on their competitve advantage and strong core businesses. Take a look.

    http://www.investortrip.com/2006/11/02/ebay-is-for-winners/

    Nice blog, and happy holidays!

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